that's all for now. i'm lester holt. thanks for joining us. [theme music] welcome to "street signs." >> the world economic forum prepares to close out the week tensions remain high an agreement with washington is a top priority >> going back to the table

we need to continue the positive momentum january's pmi data and the economy may be picking up speed. carrefour hits the top and shares are not back after the french spirit maker reports a better than expected third quarter revenue and extends its guidance we have some new data for the eurozone flash numbers for the pmi manufacturing coming in at 47.5

against 46.1 for december. the number for the composite future output of 50.9 against 51.2 again 51.5 against the 51.2 for december not great numbers for service in france this morning, half an hour ago slightly better than expected in german manufacturing >> interesting to see not quite as weak as the market had expected on the back of what has been a strong couple of prints. the zoo survey showing business sentiment there. at the margin since december, the soft data for europe has improved >> we have a bump for the euro we had those numbers out half an

hour ago let's look at those number as cross europe >> we are seeing green across the board. a firm rally underway here we are looking at gains of more than 1% for the stoxx 600. currently up 1.2%. every sector, every region in the green. this comes after a difficult week for global markets as concerns around the coronavirus outbreak hitting sentiment it is too early to label this outbreak as an emergency investors seem to be taking comfort in that as well as the stronger numbers out of germany. we are all waiting for those uk pmis due out soon ahead of the boe meeting next week. green across the board here.

ftse 100 leading up 1.14%. the dax, 1.2% higher cac and ftse mib also forging ahead. green across the board every sector higher. travel and leisure rebounding. luxury as well retail up 1.6% investors seem to be taking comfort so far in terms of response from beijing. bringing in rachel, our guest, in the studio one thing i've been watching from davos this week is digital

taxation >> thank you it is great to be here with you both it is contentious for two reasons. one, the french and others are focusing on sales and turnovers. also to focus on profits as we know, big companies are good at finding very low profits. that may end up with as result of low taxation. that comes up with a time where there are also privacy and other regulations. what i think is also different here is that the oacd has been doing work on this issue the u.s. has been involved in those discussions. some of those things make a

little bit of an opening because the u.s. has been focused on making sure companies don't just park their profits abroad. i think it will be a tough battle this year and the oacd will be behind it. the europeans and saudis as the core is this sort of issue of tax divergence. i think that will get confused up in the other trade and irtents with u.s. and europe >> you mentioned the phrase tough battle over the next two months is the thing that makes investors nervous, this transition for a question of trade policy >> completely. in a sense, one of the reasons it is is because in a world where services are a much larger

portion of turnover between undeveloped places there was converge yence at the european level france has gone ahead, britain has gone ahead on its own. they would all want a global level solution the u.s. has said, maybe the response to a digital tax is not just tariffs on french wine and cheese >> and don't forget handbags >> and also cars in a sense, once of the things i think has markets on edge. the threat of auto tariffs is being used as a counter on my issues whether questions on iran, questions on tax this is a point on europe and germany and its supply chain

versus the economies including france and the united kingdom. while this is all going on, we have the united kingdom negotiating with europe. a lot of business actors are saying, wait what are the terms going to be i think we are finally seeing the trump administration focused more on services if we look back at the conflict to date whether europe, china or other producers, it has been focused on goods that is not the core of what the u.s. is producing or developed economies are producing. the challenge is i don't think they yet see eye to eye. >> thank you we are fortunate to have you here for the hour. the german finance minister has told cnbc germany was among the countries most affected during last year's trade

tensions but insisted the government spending would continue to sustain modest growth >> just to say something about german economy, we have the highest number of employed people ever in the history of germany. there is a select of people that would like toenter the border and knock at the door, they would get jobs the next day. this is the situation we have. we know there is a big global problem, the trade tensions have had an impact on the development of global growth germany is a successful import nation it is clear this has an impact on those branches that are successful in business and exports. my view is that with the expansionary financial policy we had last year, we did our job.

anyone even internationally agrees that we made it and have the better growth as without this financial policy we followed >> wir now also reaching the highest figure of public investment ever in the history of germany i already said to anyone that we will be able to continue with this and even make it a bit better in the next years so this is really a very strong message. >> but, do you feel at some times with all these calls germany has the headroom to spend that others treat you like a piggy bank they can keep going back to every time they fail to push forward their reforms is. >> we push forward our reforms we took very strong decision from climate change. we established as one of the

first, not the first, one of the first nations something like a way of taking prizes for co 2 emissions. we established a decision which makes it possible to rely on renewable energies it should be 65% of the energy supply in 2030 we decided to go out of the use of coal plants for electricity within a short period of years up to 2,038 which means there is approximately 40 gig a bite which means it will be used by other forms of energy and starting very strong in using hydro. this is all the things to happen this will cause a lot of private investment also as the public

ones to give you the idea. the big grid is private investment the energy supply, the windmills, the solar energy is private investment if you look at the car industry, it is many many billions which are now used for changing the way we use our cars with electrifying them. this is the high-end technology, which is now starting with big investments with germany >> tahe italian minister has tod cnbc, he was sorry to see the leader step down of the five-star movement because they had a positive relationship but thought his resignation was the right decision >> italy sees that as some form of government. we decided our party to join

this coalition budget load was serious in terms of reorganizing the main line and now starting the second phase of investment. speci specializing ourself in the green deal in this, there is the party like the five stars that opened their party to the organization like they are going to do in march. the minister that was the leader that brought the party to great success now decided to help this renewal internal discussions i feel sorry for him because we are friends but i think he did it to stabilize the party and government >> i understand that but you are also a coalition of two complete angels a coalition of odds of sorts can it continue when one of your partners is undergoing so much

turmoil. we've had deflections, resignations, we've had people leave. how can you survive when your coalition partner is undergoing so much turmoil? >> what we have to do, as you know, september was a moment because it was an issue that came out we are faced with what to do with the country we have a large majority even if some mep went out. they are supporting our government targeting ourself on investment and reform until the government reform all of this result, optimistically, we can realize the program >> okay. so you are going to try to keep the coalition together to realize some of those plans. we have regional elections coming up this weekend >> in two days

>> it is a very tight race it is essentially what people are talking about. it has become a referendum doesn't that tell you the public want a general election? >> i must say these two elections are regional one -- >> but it has been a strong hhod for pd for a very long time. >> it will convince the people for thirst trust for another term in terms of government going on, we are stable and/oriented to reform investment and growth

>> if you have any thoughts ahead of the italian election, follow us at twitter willem is heading out to cover those. send some restaurant recs to him or to me we'll bring you the latest development and discuss the market reaction next a golf course is designed to be difficult. to challenge your thinking and test your execution. but great minds are driven to seek out the complex. they see what others don't, from an angle others won't take. they learn that embracing those challenges is what sets them apart. i am justin rose, and we are morgan stanley.

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welcome back to "street signs. the coronavirus has now killed 25 people and affected more than 800. a lockdown continues in wuhan. and in nine other cities, they are shut down transformation and canceled flights there are concerns of the spread

because millions of chinese will start to travel nationally and intd internationally to celebrate the lunar new year >> i'm not declaring a public emergency of international concern today. make no mistake, this is though an emergency in china. but it has not yet become a global health emergency. it may yet become one. the ceo of noef ar tuesday told us during an interview in davos that officials there have sought to tackle the outbreak quickly. >> it is great to see the response the chinese government has been

very transparent they've been telling updates on an jo an ongoing basis you've seen the human-to-human interaction. critical disease agencies around the world are getting active until wea have all of the facts it is difficult to judge you have to get all of the facts together before you take action. >> our guest is still with us around the desk. as we just heard there from the ceo of novarti surcs, transpares huge with the sars epidemic, beijing came under fire for underreporting

now xi jinping is facing a number of issues >> sure, you never want, as a leader, to be dealing with a crisis like this or forcing large portions of the population to basically shelter in place. i do think after a slow start, the chinese government recognized that their own population needed the information. there has been much more coordination the timing is of course particularly challenging coming right before the lunar new year but local authorities seem to be tamping down on places where people are in the public we'll see, i think we'll be focused in on all the other policy issues. any world leader has to deal with many things at the same time what i will say is, one thing that struck me, is how quickly some of the chinese medical

professionals sequence -- i'm not a health economist or expert, quickly identified issues and this may be one of those cases where a quick ramp up in china on the medical issues is something we look back on as a sort of mitigating factor >> quite remarkable how swiftly they have been able to take action like builtiding a temporr hospital we saw luxury and travel and leisure take a hit what can we clean in terms of how markets react to this? >> looking at the past but also look at the policy response. cases like this, decisions like

cutting transportation and shutting down festivals, they may contain the virus and lead to peek epidemic but they also have impacts people that were planning to travel and now will not travel, that has an economic impact. it might shorten the duration of the crisis past examples, yes, i would watch across the consumption base not only luxury but also durables, transportation stocks. i think this has reinforced already a bit of a barish tilt on oil price and oil products that has maybe seen some deescalation in the middle east from the beginning of the year i would also watch whether this has an impact on the chinese or other production lines it depends on the duration of

these measures >> at the start of the week, the imf issued the growth forecast and showed china growing 5.8 to 6% this year that was based on the idea that there would be no additional tariffs but the original tariffs would stay in place. do you agree with that do you think the chinese economy can grow faster despite that >> i tend to think the difference -- it is symbolically important whether it is 5.8 or 6% even though it is a relatively small difference some of it comes down to financial math and calculations when the weakest -- the chinese economy was the weakest towards the end of 2018 and early 2019

so that makes it a little easier at the end of the day, yes, chinese authorities are doing a little monetary easing, not very much on the fiscal side. as we know, the overall headlines are even more political than the underlying ones i wouldn't be surprised to see them reporting a 6% growth my sense is, we are heading in to the fives >> thank you we'll squeeze in a short break stay with "street signs," we'll be right back. ♪ where others see chaos, we see patterns. ♪

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welcome back to "street signs. i'm willem marx. >> i'm julianna tatelbaum. these are your headlines the world economic forum prepares to close out the week telling cnbc, an agreement with washington is a top priority >> going back to the table and reaching an agreement is of maximum urgency. we need to take on the second

stan strans of mr. trump's statement and continue with this positive momentum german yields rise a suggestion that europe's largest economy may be picking up at the start of the year. and carrefour tops the stoxx 600 after offsetting a slowdown after the core french market shares are not back after the french spirits maker reports a hit and suspends its guidance. we are just awaiting some uk pmi numbers to come out. new a huge amount of speculation about the bank of england

potentially cutting rates next week there is some tension of how that is priced in. >> interesting we heard that dovish commentary come out of the bank of england earlier this year we saw a massive drop in the pound on the back of that. the data has been stronger jobs data, business has shown improvement. we have seen a bit of a mixed picture. it has been very, very key this pmi data is the last piece of key data coming out before that meeting particularly, it's the january flash pmi. this is data post general election a lot of this data has been from before that december election result we just got the numbers in now the flash composite pmi is up to

52.4 back in expansionary territory, also ahead of expectations >> consistent with gdp growth quarter on quarter for early 2020 we've seen the pound hit a five-week high before those numbers came out extending gains now. up 0.3% at 1.318 futures briefly touching a session low after that data came out. absolutely key here for uk investors is the pound it is trading firmer versus the dplar at 1.31. investors reassessing the likelihood the bank of england put forward the dovish stance. all eyes on the bank of england meeting on january 30. important implications for the

uk bank. we'll keep an eye on that. the europe trading on the back versus the dollar at 1.10. no policy change as expected from madam lagarde and the governing council yesterday. they did go ahead and launch the beginning of that strategic review a lot of questions on the way they look at, assess and measure. a lot going around around the dollar and swiss frank let's look at the equities green across the board equities hanging on to the early rebound across the board ftse 100 up 1.4% so rallying despite the parallel rally in sterling, usually that core relation is inverse the dax up 1.4% on the back of the stronger than expected pmi data from germany.

the key for the eurozone economy. let's look at the futures. a modestly positive start. concerns weighing on global sentiment throughout the virus outbreak in china. the wth has come out saying it is too early to label the coronavirus as a global emergency seems to give investors comfort as are those swift actions being taken by beijing. watching ericcson after a lower than expected rise in fourth quarter earnings. saying a slowdown in the business but still confident it will meet targets. also lower, french spirits group

cited slow growth in hong kong the drinks maker has announced, it will suspend previously issued guidance and extend a new road map later this year baye everyoner shares highe announce the roundup settlement discussion they currently face more than 75,000 lawsuits. that number has been rising. a substantial number of lawsuits they say roundup weed killer caused their illnesses the german finance minister said the european proposal is

now on the table >> no, not really. i think we know there is a need for debating on trade. we already started from today and made proposals about the free trade agreement between the european union and united states we now discuss about the proposals from europe for instance in finding an agreement on the table, i think we could be confident that speaking would make it possible to find a solution which fits to all in the world. in the end, we know that trade is something that is more successful for anybody if there are not too many barriers. >> it sounds like you feel there is already significant progress being made is that accurate >> this would be too much but there are talks. there had been an agreement between president trump and

president juncker. there is trade talk. i hope in the end this will help to find a good solution. there is a great willingness to find something in the end, we are as the united states were for a long time, very much in favor of free trade. so it is not too difficult to continue with that >> the president said to him many times thatthe europeans are turning out to be hard negotiators with the chinese we know he has a limited attention span sometimes do you think he might get irritated, when he does, he tends to lash out? >> i think president trump is representing his country he is the elected president. we will work with him as it is absolutely necessary european union is the greatest place for economy in the world

the strongest place if you come to figures it is the fair partnership that is possible. we are working to make it a great thing. >> you said on the record. we probably have a global digital tax in place by 2020 or during 2020, i think were your words. we don't seem to have much progress yet we know there has been some tit for tat on the go it alone british tax or go it alone italian tax. are you afraid if some of these countries push ahead with the tariffs? >> there have been a lot of talks in g 20, g 7 and the oacd. the right places to do so about how to better avoid the taxing of countries and governments all over the world

we agree very much also with the united states. they have their guilty tax it is highly likely to get the proposal from the beginning of this year that could be discussed in the next months this is the same with a more difficult solution with how we tax the rate of digital platforms for instance there is a need to change that system this is for anyone not just related to digital companies as we know, it is really a proposal possible from the oacd in the beginning of the year we can discuss it. anyone that has some experience should understand this is the

time for a global agreement and not global dispute >> the president of the euro group and portuguese minister of finance told cnbc that talks with the u.s. is maximum urgency and praised paris on the progress on talks of the digital tax. >> going to the table and reaching an agreement is of maximum urgency. we need to take on mr. trump's statement and continue this very positive momentum that we have that will present clarity to everyone this is key for investors to jobs, for financial markets. we need to take on the positive. >> where is the upside and the win for europe it seems president trump wants to correct the numbers, whether deficits on the trading

partnership. how does europe win out of this? >> i know, trade is also a two-sided event. we need both sides to be happy with it and feel the gains from it there are a lot of things to gain around the agreement around concerns for both parts. i think i have to praise france and u.s. to get into at least to that fight -- >> digital taxes >> the out-mobil taxes we need to really calm down to the table, to negotiate and if an agreement is made it will be positive for all sides. >> all right let's get back to our guest host rachel, i want to get your view

on data that just crossed the wire this morning. the german numbers are better than expected. in particular on the manufacturing front. so still weak. not as weak as expected. the uk numbers also better than forecast what is this data telling you? >> couple of things, one, it reinforces the story of services outperforming manufacturing, which is really a global trend not just in europe but across the board. the other one is this bounce in forward looking new orders, new business sometimes that can be overoptimistic that is something i would watch. all in all, it seems to reinforce the fact that after a tough mid-2019 for local and global reasons, that there is some recovery. i'm not yet seeing anything that says there is a massive

increase i think to see that, we need to see more clarity on trade rules and fiscal measures that many european policymakers and central banks are watching for this is not. i don't see any signs that inflation is coming back but this is a story where recession risks look to have abated. this is not the concern. this is sort of a sluggish growth environment >> you mention inflation this is a key part of the review under way that was launched yesterday. in a way, it was nice for the ecb to be looking at a relatively benign place to give them a buffer period if this is the beginning of the rebound and bottoming of the economic activity here does that complicate this strategic review of the ecb?

>> not necessarily if it is the bottoming. i would highlight we were talking about some of the big economies suggest the performance that might even reinforce some of the divergence within the european union particularly within the countries that don't have the scope on the fiscal side more ultimately, the challenge they face has been far from reaching the inflation targets over the last many years the debates are still great between whether they should be thinking about a very different rate i think there will also be more and more question marks about how to think about the bank and insurance exposures, particularly to climate and weather events that's not formally a part of the review but i think there will be more and more pressure in that regard particularly for

those looking for more expansive, political and fiscal stance thank you, rachel. an email just sent out informing us the new appointment to the bank's supervisory board looking to maintain strong relationships with the governing party of germany there soros is saying president trump could face a calamitiy saying the administration had managed to overheat and, quote, an overheated economy cannot be kept boiling for too long. saying the chinese president xi jinping is trying to exploit trump's weaknesses

clever analogy there key piece that does not focus on structural issues. our reporter sat down with china's state owned data and administration commission and asked about reform >> translator: frankly, there are almost no subsidies left for the specific ownership from the perspective of market competition, it is reasonable request to regulate government subsidies towards enterprise of all types. >> reporter: many are still concerned about state-owned firms behind china's corporate debt how do you cope with the debt risk >> translator: many enterprises in china support its operations with bank that made the debt to asset ratio relatively high. we swapped for equity and

lowered debt to asset ratio this way and es sttablished speciali funds. we think debt is still under control and there is no risk of corporate debt >> reporter: how can foreign countries play a role in china's reform where do you see opportunities for foreign investment >> translator: china's soe reform is very open. in recent years, we emphasize in mixed ownership reform to work together with foreign investment to make the asset structure more ver sers tile. this improved and made more dynamic and provides better opportunities for foreign-owned enterprises to participate in soes in the past, forming joint ve

ventures it can participate in inventory asset management our understanding of state-owned enterprises and that of werners are still very different many westers think soes belong to the state but they have become marketized. we follow rules of the market and are completely independent in the market. in market competition, soes are completely independent and separate from the government who is the share holder isn't important. but it is important to follow the rules of market and business it is pointless to focus on who are the share holders behind a company. coming up on the show, big tech posts full-year earnings. we'll discuss what to expect from some of the world's most

valuable companies stay with "street signs. s ago, my wife and i were over 50k in debt. through sofi's help refinancing we paid off all that debt. now we're debt free and visiting places like this... thank you guys

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. mumuninityty..d d dedevevelp welcome back let's talk tech. intel shares rallied the chip maker beat fourth quarter estimates with an 8% growth in revenue after three straight quarters of flat or declining top lines. the company signaled a turnaround on cloud commuting and strong pc sales. for more, tune in later today when ceo bob swan speaks to us at 17:00 cet mark your calendars, apple

releasing fourth quarter earnings on tuesday with facebook and amazon on tuesday and wednesday. we've had netflix so far. plenty of other ones coming. how are you thinking about streaming competition at the moment >> i think netflix is perhaps one of the more interesting stories at the moment. most of these big cap companies are benefitries of the network effect companies like facebook is clearly the dominant network in the world of streaming, it is far more competitive the real question is will they be the dominant network winner or will the competition make it very tough for them. there are a couple of pointers network winners will start to achieve the 20 to 25% share of

the market they are in they have 167 million subscribers, which is bigger than all the cable companies put together i think they are in a good starting spot. >> one big question of the starting share and how to get there. they have a big content. netflix is adominant spender do you think how much of their total revenue reinvest in the critical content >> netflix announced they'll spend $17 billion, up from $14 billion. we have never seen them spend less than they expected to spend. that means they are remaining unprofitable can they outspend their rivals

and ultimately get leverage fra that spending. >> what is the key read across the sector >> the key was cloud growth, which is 48% they saw 48% growth in their cloud sets for next week, microsoft, amazon, their cloud businesses will be very interesting to watch in that respect. >> concentration risk is a big topic. alphabet became the fourth company in history to join the $1 trillion club is this a risk >> i think it depends on how you define technology. if you were to go back 5 or 10 years, i would be investing in companies that were all sales.

now the big technologies don't focus on sales facebook sells ads it is really a sign the world is developing into the place where the use of technology is critical for all business models >> thank you for joining us, the investment director at gan investments. also thank you to our guest host this morning, racial zeiamba. looking at futures for wall street that is it for us. i'm julianna tatelbaum >> i'm willem marx "worldwide exchange" is up next. hi! we're glad you came in, what's on your mind?

can you help keep these guys protected online? easy, connect to the xfi gateway. what about internet speeds that keep up with my gaming? let's hook you up with the fastest internet from xfinity. what about wireless data options for the family? of course, you can customize and save.

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s it 5:00 at cnbc global headquarters here is your "five@5." china looking to stop the spread of the coronavirus as the death toll rises overnight fears keeping wall street gains in check as the dow looks to recover from three days of rises. speaking of intel, the stock is looking to open at least 6 percen